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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Thursday, 16 February 17
IF I PLAN TO UNDERTAKE A CHARTERPARTY WITH AN UNFAMILIAR ENTITY, WHAT STEPS CAN I TAKE TO ENSURE THE CHARTERER WILL PAY THEIR HIRE? - SHIPOWNERS' CLUB
KNOWLEDGE TO ELEVATE
Due to the difficult conditions currently existing in the shipping market, particularly in the offshore sector, Members a ...
Wednesday, 15 February 17
SHIPPING MARKET INSIGHT - INTERMODAL
Looking at the state of the Dry Bulk market exactly a year ago, there is no doubt that there is a significant improvement and despite the fact that ...
Tuesday, 14 February 17
OPTIMISM HAS STARTED TO SLOWLY FLOW BACK INTO THE DRY BULK MARKET - GEORGE LAZARIDIS
Optimism has started to slowly flow back into the dry bulk market, with many in the market showing renewed optimism as the Pacific basin starts to ...
Monday, 13 February 17
COMBINED COAL SALES OF BUMI RESOURCES ROSE TO 87.7 MILLION TONS IN FY'16; UP 10.6 PERCENT Y/Y
COALspot.com: Combined Coal Sales of Bumi Resources rose to 87.7 million tons in FY’16 compared with 79.3 million tons in FY’15. ...
Monday, 13 February 17
THE FREIGHT MARKET CONTINUED TO TUMBLE IN FEBRUARY
COALspot.com: The Freight market was continued its downfall in all segments except Panamax for the week ending 10 February 2017.
The Balt ...
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- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Australian Coal Association
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- The University of Queensland
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
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